(a) whether the German firm Eurokai KGAA Hamburg had requested for withdrawal of bank
guarantee in the month of September, 2000 resulting in trade losses besides economic losses
to CMC Ltd;
(b) if so, the reasons therefor and present status thereof;
(c) whether the Government have identified the persons responsible for the said losses; and
(d) if so, the details thereof and the action initiated against them and corrective
measures adopted in this regard?
MINISTER OF PARLIAMENTARY AFFAIRS AND INFORMATION TECHNOLOGY (SHRI PRAMOD MAHAJAN)
(a),(b),(c) & (d): CMC Ltd. had signed a contract with M/s BLG and M/s Eurokai, Germany for
DM 1.30 million and DM 1.875 million respectively for providing the software solution based on
their MACH and, as part of the contract term, had provided Performance Bank Guarantees for
DM 793,750. The customer (BLG/Eurokai) has unilaterally terminated the contract and
encashed the aforesaid Bank Guarantees. The reason cited by the customer for this is delay
in implementing the project. The Company has strongly refuted the unilateral action of the
customer which is in violation of the contractual terms and conditions. Further
negotiations are underway. The question of assessing the loss and fixation of
responsibility in this situation does not arise.